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Credit Card Reward Points

October 29, 2010
My father always told me that if I leave money on the table in a poker game people would always want to come back and play with me. Then he would also add, “Son, just never leave too much.” After a recent conversation with a rep, I realized I was leaving too much money on the proverbial table. The rep told me that one of my fellow retailers was on an extended trip out of the country that he had fully paid for with credit card reward points. Now, there is nothing unusual about taking a trip with credit card reward points; however, he had earned these reward points by paying for the inventory in his store with his credit card. He wasn’t leaving any money on the table.


For several years now, it has become the rule rather than the exception at the Atlanta gift show that I have to pay for opening orders with a credit card. This always galled me because it implied that my credit wasn't good enough to get 30-day terms. Over time, I began to realize that whether or not it was a reflection on my credit worthiness, paying with a credit card gave me the exact same terms as if the vendor had given me net/30 terms. Not only that, I picked up a few frequent flyer points. It never occurred to me that major vendors (read: furniture manufacturers) would accept credit cards. So, it was eye opening for me when the rep told me about that retailer.


Immediately after that meeting, I asked my office manager to check with some of our vendors and see if they accepted credit cards. If they did, I wanted to find out what types they accepted. As it turns out many vendors do not accept credit cards. Others do accept credit cards but add on a convenience fee. In most cases, the convenience fee was more than the reward points we would get.


However, there is a set of vendors who do accept credit cards. A few that we found are: Brown Jordan, Classic Cushion, Ebel Inc., Gensun, The Hammock Source, Homecrest, Treasure Garden, Winston, and Woodard. I am sure we will find more, because as we prepare to pay invoices, we will call more vendors to see if they accept credit card payment.


In addition to the obvious advantage of getting reward points, there is also the advantage of getting slightly longer terms. For example, if a vendor’s invoice is due on the 27th of the month, wewill put it on a credit card that day. That same balance will now become due approximately 30 days after that. That gives me net/60 without any additional cost. it certainly seems like a “win-win” situation to me.


So why is there a little voice in my head saying, “Don’t do it, don’t do it, don’t do it!” I suppose I am concerned that we will lose track of what we owe by putting these charges on a credit card. I’m sure we’ve all experienced something like that in our personal lives. When we pay with cash, we can see when our wallet is running low and slow down our spending. However, unless we keep meticulous records, we can lose track of how much we owe when we charge everything on a credit card. By the time the statement comes at the end of the month, the charges on our credit card may be unmanageable.


In our case, the solution to this potential problem will be to keep those pesky meticulous records. In addition, we plan to make payments to our credit card account more than once monthly. This will keep us from going over our credit limit on our Visa card. We will do the same thing for our American Express card even though that account has no limit.


So, if this all works out, I may be writing my next blog while on an all expense paid vacation in some exotic land!


Yours in confused retailing, Bruce